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Scott DeHaven, Salvatore LoBiondo, and Claire Hoffman • 1 September, 2023

U.S. Merchant Payments: Medical Practices

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Vertical Targeting Strategies for PSPs


Well-crafted vertical-targeting strategies are a winning playbook for U.S. payment service providers (PSPs) however, success is not homogenous. Before investing in a vertical strategy, PSPs need a deep understanding of factors such as:

  • The merchant landscape (e.g., merchant concentration, average business size)
  • Consumer payment preferences and trends
  • Distribution partnership opportunities (e.g., vertically specialized business management software solutions)
  • Competitive dynamics

Armed with this information, PSPs can form a winning value proposition and merchant targeting strategy. Flagship routinely evaluates vertical market opportunities for our clients. 

U.S. Merchant Payments: Medical Practices


In this presentation, we provide high-level perspectives on U.S. Merchants Payments within Medical Practices, with the following key takeaways:

  • >75% of the payment service provider (“PSP”) revenue pool for the Medical Practice vertical is earned from merchants with <$5M in annual revenue (i.e., SMB merchants).
  • The cardabale payments industry within the U.S. Medical Practice vertical is sized at $325 Bil. (2022). Family practices have the highest market share.
  • The Medical Practice vertical generates ~$800 Mil. in annual revenue for PSPs. ~60% of PSP revenue is earned from POS payments.
  • The Medical Practice ISV landscape can be organized by foundational (e.g., electronic health records) and more niche (e.g., dentistry) use cases. Medical Practices may use several software solutions and payments may need to be integrated across solutions.
  • Some PSPs have deep specializations in the Medical Practice vertical, while others leverage more generic offerings to target the space.

Please do not hesitate to contact Scott DeHaven at with comments or questions.